OK you're leaving
a welcome folks here for the May twenty seventh two thousand for keeping our
workshop the focus workshops are going to be on on health plans and things related
to the health plans I think we're probably going to get more information on them
and the kind of decisions of the suspect will have more meetings in the future
whatever group where we get
a lot about race questions bites into some things at all the role of employers are
here so we're also most what we call them later so I'm sort of the sort of very
strong Thank you Mr Mayor I want to introduce in case you haven't had
a chance to meet yet Graham Beaudry She's with the Horton group she's our health
insurance consultant she works with us on getting proposals together requests for
proposals and or evaluating proposals and pretty much evaluating our health
insurance program and she's been with us for
a number of years. The purpose of our work session today I want to just go
back to one of the council's goals that they set for me for the year was head to do
with health insurance you asked me to conduct
a structural review of our health insurance program so we're going to talk
a little bit about that today identify ways to control the city's increasing costs
and contributions for health insurance and overall benefit package and then
a plan to develop phase in changes over time that's that's not going to be achieved
today but really setting the table so that we can achieve that goal that the
Council has set for me. To do that there's
a brief presentation out I want to go over where our current health benefits
structure is so you know where we're at also compare ourselves to some comparable
agency and I'm going to give you
a brief overview of it but I'm going to give you some things to take home that give
you
a. More of the wide survey results that we conducted. And then local private employers
were included in that we don't have them specifically just by name but you're going
to see a profile of them you have
a fairly good idea of their substantial employers we just didn't take
a small mom and pop operation then some of the environmental realities and
challenges that's
a nice way of saying things going on in the market the Affordable Care Act its
impact on us those changes while they're not impacting us immediately they're very
much on the horizon and then strategies things opportunities challenges things that
we're to be looking at and then discussion in decisions anything that the council.
Reacts to initial reactions What's to look more into or are concerns that that you
see from our presentation today. The current play and.
We want to talk about
a little bit but we want to go back to the health insurance focus group which
becomes a better report on that last year and
a lot of it was because we knew even last year that we were facing
a twenty percent increase in our health insurance costs as we were approaching
twenty fourteen. And we knew that our health insurance fund our own internal fund
a manager's. Our health insurance was facing some cashflow is true remind everybody
we have we are up partially self which are we cover all the costs up to seventy
five thousand dollars per individual and then anything above seventy five thousand
is covered through stop loss insured so we do have insurance for cost about seventy
five thousand but every cost up to seventy five thousand we we pay for all of those
costs that come in. We also had it as you found out when we were talking about this
last year
a lot of shock losses which are losses in excess of seventy five thousand
which we've been exceeding the industry average for for years so we've had
a rough time and every employer that has a
a self-assured program goes through some rough times and we have certainly hit our
rough times. But we're also seeing that our healthy employees are leaving the
program or more to say we also have other employees who are sticking with the
program for older I think it's
a matter of of variety of things one thing is just natural demographics our aging
workforce that's just a natural phenomenon that we're dealing with. As we have
a limited positions because to say we've laid off is really an exaggeration we've
eliminated positions and we've normally done that through attrition but when you
when you eliminate positions through attrition you're by nature keeping older
employees because you're not back filling them with new employees so you're
generally getting an older workforce and older employees have more medical issues
that just by definition I mean that group so I know that I'm not seen anything out
of school we're all there. But bet because we have more employees.
Healthy employees leaving or not getting onto the plan are groups older more costs
. Employees are evaluating the premium costs I like to refer to it as
a kitchen table conversation where the two spouses are discussing health insurance
they may have both been covered by health insurance under their under their current
employer and when it was only three to five percent of the premium share you were
paying and it was easy to say let's both have health insurance but as time goes on
is going on premium cost of increased the kitchen table conversation is we we can't
afford to have both of us get insurance what's one of us take insurance and the
other one don't it will save us money but in reality we're paying more because now
you have all those costs concentrated with one employer if we're that employer of
choice which in many cases we have been our costs go up but we're still charging
the same amount those are the factors that are part of the twenty percent it's not
just because we've had
a run of bad luck the demographics are are definitely working against us. We
brought the employees together they talked about
a lot of things they liked the broad network that was in our P.P.O.
Our preferred provider plan. They recognized through this discussion that they had
that usage does drive the premium so they feel ploys are beginning to recognize at
least amongst the group that we've assembled that usage was driving this they they
felt that people use the system more should pay more and there should be more of
a direct relationship between usage and payment. At same time the employees like
knowing what they were paying when they use the services similar to what the old
E.P.O.
Or the exclusive provider plan was they would like to know that if I go here I pay
twenty dollars I go here I pay one hundred I go out of network I'm paying. Seventy
percent for the insurance only covered seventy percent versus ninety or one hundred
percent when you stayed in the network but the employees like knowing what their
costs were. So as I mentioned we have
a partially self funded plan that's our current method. We have looked at other
options we have evaluated proposals from other places you may recall that we the
discussion came out well why don't we go to the state plan. And I've been in the
state plan in other employers and you know quality wise it's a plan it's
a very good plan but there have been provisions that have been added in recent
years for example there is
a premium that they can charge your first two years in the program so even though
it's technically less than our current payment when those premiums are added You're
actually paying as much if not more than you're paying in under our current plan so
there's
a gradual phasing that you have to have because they don't want people jumping into
the state plane and then jumping out so you can pay a premium of up to thirty is
a thirty percent thirty to thirty two percent and then so. Eckstein the next year
so you're paying
a premium to get back into the plan because they're afraid you'll jump in the jump
out. We still have found through our analysis that self funding
remains the most cost effective option in the main reason being is because member
self funded we don't have an insurance company on the front end building profit
into it we're not
a profit driven group so we don't have that so we're not charging ourselves at
profit built in so that's kind of where we are with our plan right now I
want to just take
a quick break to see if there's anybody has any questions about how our current
plan is this is all new for concert pianists keep but you know we only talk about
this once or twice
a year and anybody me questions. You mentioned
spall sales if Tuesday two employees are married working for to see only one can
take insurance all right that works out that way for yeah for us but is
a brilliant or can't take it. Role and we only have one plan there that's only
necessary for one it's when there are two employers two separate back lawyers just
double check and yeah you clarify what shock losses are chock losses or anything
above seventy five thousand dollars and there's also
a term called lasered. If. And we can't disclose these because of HIPAA regulations
but if we have an employee who or
a dependent anybody who's covered by our plan who is significantly.
Expensive they may ask us to have
a two hundred thousand dollars shock loss and then we call it
a laser because it's worse than
a shock and it's we have that and we've had employees or their dependents and we've
been paying the first two hundred thousand dollars so you can imagine when we have
those shock losses that are higher than the industry average there's been
a couple cases we've had more than one laser in
a year so then instead of even paying the first seventy five it's two hundred you
multiply that by two now instead of one hundred fifty thousand exposure it's one
hundred it's four hundred thousand dollars over we've had those types of situations
. And that's the conditions under which the reinsurer will take this because they
know that person's going to exceed seventy five thousand and they're going to be
paying all those every dollar over seventy five thousand the reinsurer covers they
had systems on having these folks lasered And when we go out to bid we bid out to
the. Stop loss insurance every year we say OK Company A Company
B. But they all take
a look at our plan and if they see those potentials they say we're going to laser
this person we're going to laser that person it could be John Doe It could be John
Doe's son could be Mary Jones or Mary Jones has been could be it could be anybody
in the plan so it individuals get lasered Well then it's communicated to you or
to Mr Fitzpatrick. Who the individual is and then as
a communicated then to the employee No it's or no never OK oh that's just that's
our it's just
a consequence that's our cross that we bear in fact I don't know what I don't even
own now. What generally happens is we've been able to stop loss on an annual basis
I'll come with the best couple of packages we'll discuss them but even to Mr
Fitzpatrick typically And to now Trina we don't disclose the plan participants and
that would be in the final contract so one person will see that typically not an
individual who can hire and fire at the city because we wouldn't want anybody to
have a bad feeling about
a person or or individual because of their individual health concerns create
a rubber search over what we've probably already sort of correct on. One or two but
if we get it change one year to you next year it's me I mean I just ask them how
long we're going to remember what we have why do you have our orders are because
we're just talking average of. One hundred that are laser we've had ten to twelve
hit the seventy five and then some have over the last several years so when you
think about that when you've got ten people that's three quarters of
a million dollars right or we even get paid back from reinsurance and there were
two Year two consecutive years that we had. About ten people they were different
people each year so that wasn't ten people over two year period we had twenty
different people hit that So then you can figure that the people who didn't hit the
one year hit the next they're probably not going on that seventy five thousand
dollars door anyway so significant dollars that we're talking about because we're
only talking people who exceeded seventy five thousand fewer at seventy three or
seventy four you weren't even counted in that number but that's I mean that's
a lot of money when you start just single individuals but what point is that again
I mean how do we know a person should be lasered has
a past history or pretty insurance company figures out based on
a track record we they what do they call and it's really what we've been well it's
an underwriting process but what we've done in the past several years which has
been a really good thing we've had what's called
a conditional laser So for example if I was your I was one of your employees and I
was going to get
a kidney transplant they would say well we'll keep an eye on the regular stop loss
policy seventy five but if she gets the kidney transplant then it's one hundred
twenty five so I'd have the additional fifty but only if I got that transplant in
that period of time so we've been really working very hard to keep the lasers to
a minimum and we've had one to two over the last several years but we've been it's
been
a number of people getting to the seventy five thousand the reinsurance starts paying
a minute immediately when we had seventy five thousand one dollars they start
paying out of their own out of their own dollars but it's how many people have been
getting to that point and when you think of medical inflation some of the things
that didn't cost very much
a few years ago and he and the replacement today as we get older Mark to Mark's
point might be fifty five sixty thousand dollars if there's
a complication that stop loss within
a couple weeks of having an operation so it just started depends medical inflation
has been pretty pricey. His it's just last for your fury it of.
Rather in proportion to stop loss uses that affected our reinsurance rates. To
a degree where that's been
a concern nor has it been I would say rates have gone up yeah it's
a bit but reinsurance this property casualty insurance so they tend to recognize
that you're going to have hits and it's Kurtzer like your fire and flood insurance
they know that it's coming here to have these few bad years and then you're going
to sort of even out and that's how stop loss really works so well yes we've had
great increases they've been pretty managed over time on
a much smaller part of the premium dollar than you might think I think our total
fixed costs are approximately eight to ten percent ninety percent is paid out
directly in claims. It's double premiums correct they have it's our ongoing cost
it's all those costs as rancid with the inflation then you know the replacement is
sixty thousand dollars
a few years ago maybe it was only you know forty thousand well that extra twenty is
coming out of our pocket because it hasn't hit seven thousand and let's hope it
doesn't but so inflation is really get us more then it's had to reinsure it's
a good point so if the course of your. Talk about the some to four thousand or warm
you get charges the charges got that we were talking about before George planned
this culturally or whether we had four. However disco we're going to the other
words of both We've got to carry more Dylan. One hundred thousand dollars bill at
the disco seven thousand show you all three thousand. We put out our story
obviously are going to say whether we pay the discounted feet for and the claims
and we are roughly at approximately forty seven and
a half percent discount so if we had one hundred thousand dollars charge we'd
really be looking at roughly around fifty three. The one thing though that I would
to your question and to yours. Is the seventy five has been at seventy five cents I
started working with the city at that time you guys used to have one hundred twenty
five thousand and then it was one hundred ten we've been bringing it down to keep
your budget very very manageable when you think about medical inflation now it's
easier to knock up against that seventy five but if you're thinking about ten
claims had we gone to one hundred thousand we would have never saved enough in
premium for you guys to take on that additional twenty five thousand and liability
so we look at that each and every year or two so the cost against that seventy five
is going up but it helps to manage your budget by keeping that stop loss limit lol
in the ring it's going to when we had a little more of a cushion in
a reserve we did buy down with that so it wouldn't be such
a catastrophic it and we also had
a transplant right that's proved to be pretty effective. To
I think it was shortly after Mark got here we talked to Mark about that and he said
let's go forward with it and that was
a good decision by going back to what you just said I was going to be my question
about raising that some if I don't know the workforce but it makes sense to bring
it up. But we get your point your game lean
a little bit that you may have health issues but well it has it's really not as
much of
a gamble as you would think because at what at the end of the day every time we
shop this we ask the carriers for
a seventy five and eighty will go all the way up and then. We decided OK did we
save enough in premium if we know we've got four people that are probably going to
hit again OK are we going to save that twenty thousand to go to eighty are we going
to save that you know and usually the honest answer has been no seventy five is
a pretty good level because most regular stuff stays under that it's going to be
the transplants it's going to be the big cancers that are going to go over that and
we want that protection for the plan particularly when we're struggling to manage
budgets it's worth it to keep our maximum out of pocket at
a really good level things. What are the details in the transplant right or what
does that entail. The transplant rider allows us to not only the
financial protection but also it has some medical management portions based built
into it so when employees there are going to see they can have
the assistance of medical management training the whole. Understand the process
help them go through. All the mechanics of the transplant itself
what where to go to look for how the process works. As it's also
after care any complications just from the date of
a transplant for three hundred sixty five days following it one hundred percent of
the charges are covered for the employee and the employer so it doesn't come
together for the stop loss it doesn't count the employee has no deductible no out
of pocket and that includes their immunosuppressant drugs the great thing about
that is they can then go always to
a center of excellence know that they've got great care and if they're going to be
taking care of afterwards it does I don't have to have
a second mortgage on my house or try to sell my first one to get
a twenty inch incision but it was also
a good decision from the employee present. Unfortunately we've had to have some
employees that you know and we had good success with them I think there's
a mantra. Amount of money that even our plan covers for
a transplant so if we didn't have the writer once that Max was left or exceeded
the employee was going to assume the loss that was several hundred thousand dollars
just leave was the cap but if it went over that which it would. Almost guarantee
because of the whole year afterwards and complications that result from that. You
could find an employee with an extreme. Financial liability you talk about second
mortgages and things and not only that the grand mansion sues some of the drugs for
immunosuppressants you know they are they can be extremely costly can be twenty
thousand dollars
a month this is for the drugs the program the rejection of Ogun organs so it's it's
a very soon to avoid
a laser because by doing that by getting that type of coverage we also avoided
a laser on that person because we thought it was covered those things that are part
of the laser they were covered by going going back to the laser for just brief and
I know we don't cover. Do we have
a Do we have an appeal process for that or we're just at the what they say the
person's lasered thats it. Correct that's part of the UNDER A Because we can choose
not to go with them we go to we go from company to company B. X.
Was the company might have two losers the next we might have one and it's always
really well worth it to evaluate and we do each year we'll say OK what's the
likelihood that this is going to happen this individual because again if you can
get a conditional laser reality is you get rid of lasers OK but there's
a cost so they're not nonprofit organization right so if you think they think
they're going to pay that hundred twenty five you're to pay an extra fifteen
premium or an extra forty and OK there might be a little bit of
a break even so if we really think that it's not likely and it really we have
underwriters for this and our staff and team so that people are looking at this
pretty good with some nurses saying is this really going to happen and then we
evaluate whether we take the laser or we pay
a little extra premium and somebody has written yes long we think you really have
to order to read We're going to want to pay it so the next issue is how do we
compare with other public and private employers we've got
a whole service with lots of data that I'll just give it to you to take home with
you we took
a look at things like employee versus employee contributions plan design including
self insured other lines of coverage offered and these are some of the communities
that we looked at these are the the cities that we there are comps for for
historical purposes and we did three other local private employers as well so what
we find so we have about ten respondents including us so ten out of the survey
seven of the nine have self funded medical plans the larger cities typically do
because they can manage some of that themselves I know the county has gone back and
forth between self insured fully insured and they're leaning towards going back to
self insured for the same reasons that
a large A lot of these larger employers do eight out of the ten offer more than one
medical plan we're not one of them we we technically have more than one medical
plan. But that's really just for transit because of our union negotiations five out
of the ten offer three or more medical plans so a lot of times that is is offering
a higher deductible lower premium type of thing you can do those types of things.
For out of the ten respondents offer health savings account three out of nine offer
health reimbursement those if one didn't respond we showed them and those are some
of the things we looked at Additionally wellness is
a big issue five them are standalone programs that bill use and the definition of
wellness we're going to get a little more into that
a little bit later but biometric screenings are things that we take
a look at statistics about our our group. And we it's based on these screenings
that we do blood draws things like that. And it helps us understand what our
workforce will looks like but we currently only do screenings for our employees we
do not do them for dependents I think we we allow it but we we don't require it
there's no reason that we offer it right now. Only one respondent offers employer
contributions to wellness activities through the H.R.A.
. One responder offers
a contribution differential based on tobacco use eight or nine are in the process
of looking some other type of differential for
a cherry biometric screening which means there take
a look at the how healthy the group is and basing rates on that as
well the only we do offer discount right now we'll get into that
a little later but it's only on taking the health risk assessment.
Ninety nine are still eligible to participate and help plan if they don't do the H
R eight bet includes us we just have
a premium if you don't take the health risk assessment. For other four out of the
to. Then offer an employee plus one and I want to just briefly tell you about
employee plus one there's a lot of assumptions that employee plus one means like
a single parent and
a kid and that's true that doesn't clue that but that is not the correct stereotype
it really is more of the empty nesters it's not an employee plus one child it's an
employee and another spouse and that's when I talked about that the kitchen table
conversation you know empty nesters both working they pick one or the other. So
only four out of the ten offer employee plus one plan Mark your statistics are
three hundred eighty we have three hundred eighty nine spouses on the plan and ten
single parents so there goes that means it's not what you think it is most people
think it's single parents it isn't not at all. Four out of the ten offer
a post sixty five retiree plan all seven cities it did respond to this question
have pretty sick five retirees so that means early retirees they cover. See it see
some of those things. All the other respondents have
a dental plan I'm just pointing it out because we do not have
a dental plan and so while in some cases we may offer some other things that
employees employees do get here they don't get dental they are just just in full
disclosure that's
a weakness in our play compared to others. It's
far. More. Voluntary you want to you want in the plane you're welcome to
a picture of your pay in the full full boat so that there are three drivers correct
very good point and even
a structural discomfort and even the employer paid is probably partially paid I
think it depends on the plane you get very good point. They have to talk about
where some of the market trends are. With market trends these are things that are
just happening out there whether it's due to affordable care act or it's just
employers in general trying to manage their costs but what I want to talk mostly
about is how this is going to affect the city and some of the decision points that
we may be making
a little bit later on as we kind of look at what our challenges and opportunities
are going to be so we already mentioned and Mark mentioned the dual plan tear
basically the new theory about dual plans and this is
a complete antithesis of how most people think not only do most people think that
it's just me and
a kid which it isn't and we kind of saw that on your health plans to test X.
But a lot of people also think that me and my spouse I have got to be cheaper than
a young family with three or four little kids well I'll tell you what I think about
that statistically if me and my fifty year old husband because we're both at fifty
are just doing wellness stuff I call and ask obese are five thousand dollars apiece
before discounting our blood work is different my husband is a prostate and it's
a test I need pap smears I need mammograms I'll take two thirty year olds with
three little kids any time because they're getting their Nina act in their ears
listen to what they're probably having one hundred dollars. You know for
a wellness check up and we're having five to ten thousand depending upon what we're
having taken care of so when you look at the health plans to to Stickley. The
reality is is that two fifty year olds which is
a big part of your plan are going to be always higher costs so if you were going to
do this logically and actuarily you'd actually charge the employee plus false more
than you would charge the full family instead what happens is you can tell an
underwriter to carve out your rates as many ways as you want or however you want so
the reality is that the end of the day if I need ten million dollars to run your
health plan I'll carve up to employ plus spouse employer plus children and full
family but the full families are going to pay more to subsidize those middle tears
if you want them to be paying less it's just the way it works and as we
statistically start to float to more dual plan choices the reality is we're
burdening those costs on some of our younger folks and then they're making
different decisions around the kitchen table the other reason to talk about the
dual plan tears most of the private sector employers are looking at doing
a couple different things with spouses they're looking at special carve outs which
are saying if your spouse is eligible for health coverage where they work they
can't be on this planet all. Now I'm not suggesting that the city does that but the
reality is if every private sector employers doing it you're going to end up with
more of those employed plus false is back on your plan just an obvious choice goes
back to the kitchen table discussion if you and your spouse are talking about it
and one ploy or is going to pay for the house the other one says you got to go
separate Well then you're naturally going to go to the employer that pays both of
them that will cover both of them as opposed to paying for two separate plans
that's. We're going to it's you know we talk about adverse selection where people
go away from
a plan this is this is adverse selection into our plan and they're the they're the
fifty's and older group it's not the employee plus one child so we're getting
we're getting more expensive cost because of that well and you think about just
even the economy where people are losing jobs it's typically
a little bit sometimes the older workers so they might. Becoming back on your plan
so it's it's just
a decision point that we have to be aware of because our plan is going to have to
respond to it the other way to handle spouses this fossil surcharges this hits
every spalls equally you have a spouse on the plan you pay more. It's just
a reality the Affordable Care Act By the way specifically says that employers do
not have to provide coverage to spouses at all for any reason because now they can
go to the exchange so they have a landing it may not be
a soft landing that they would have liked but they have a landing so
a lot of plans in the private sector particularly smaller employers are saying
we're just not if spouses around are going to pay MORE hundred dollars more
a month fifty dollars more
a month something along those lines just to be on our health plan the reason that I
spent
a little bit of time on that is because of the other thing that's coming down the
pike we have a Wisconsin Supreme Court that's deciding right now as well as
a federal court deciding whether our constitutional ban against same sex marriage
is constitutional here in the state of Wisconsin So if the courts decide that we
need to put domestic partners on our plan and we don't have special surcharges
we're actually or we do we had spousal surcharges we're actually creating
a newly eligible class for partners where spouses would be excluded so we just need
to stay on top of this we're watching it very closely for the city but there's more
of
a discussion here than just isn't the right thing to do with their tax consequences
because they're not married the way the state would look at marriage so there's tax
consequences what do you do with the kids
a couple of the technical colleges have allowed the partner but not their children
Wisconsin does not allow for dual adoption so if the children of
a domestic partnership belong to the partner and not the employee and the
partnership is dissolved the kids don't get COBRA so they're literally off the plan
the day the partnership is dissolved with no ability to stay on the plan so
a lot of just different weird little things going on with dependent eligibility
that we should be cognizant of and we need if we're When that those decisions come
down which we will likely not be
a direct party to will be indirectly impacted if we get our spousal benefits.
Policies are ducks in
a row on that then when it happens we can respond appropriately in quickly rather
than reacting to something so that's probably
a big takeaway from today's. It's in general. So that.
The last two we have early retiree benefits as I mentioned as we mentioned in the
survey and you're going to see this when you read the results even the parties that
have them all of the cities six out of seven respondents are saying they're trying
to buy these out they are trying to get rid of them they're trying to do retiree
only health reimbursement accounts where you can put in
a large deposit on an annual basis so that when the retiree leaves your plan they
get COBRA and then they've got to go find something for themselves so almost
everyone is saying we can't afford this other post employment benefit liability
it's really starting to hurt our budget Terry spreadsheets and our in our balance
sheets we have to look at this so cities are and colonies municipal governments
quite frankly are the only ones that are still doing this cities are unique and
you're you are unique because
a majority of your population typically fifty to sixty percent are police and fire
they legitimately can't do their job sometimes tell sixty five so you're going to
have an early retirement where it may be appropriate from
a workforce development situation but not necessarily looking good on your
spreadsheet So again something to be aware of how many retirees do we have on
average approximately per year. Yeah. Fifty currently that's ten percent the only
reason I ask is because typically the conversations that I have with people that
either just retired or are looking to retire is to Reanna spry and they literally
will go and have any test anything done the last six months of employment.
Before they're out and that's just
a real challenge with our costs demographically the last few years too we've had
retirements based on polls that tend when but bargaining agreements are going to
come up three but the. We tarried everything for premium All right citizen pay
a portion of that right but if but think about your own mindset if I was going to
pay roughly two thousand dollars a month for
a family plan why am I going to do that I know I'm getting
a value out of it it's not usually just for
a safety net or protection anymore if I'm really truly healthy I'm going to look
for private insurance that cost me
a lot less so we're getting adversely selected against by having those retirees on
the plan even paying full premium they know they're getting
a value out of it we are all good consumers. Right but we're not in
a lot of times it's
a safety net I had something go on or I'm you know in our our age group and I say
ours collectively and some of you are younger so I apologize but we're very much
about it's why we sign up for Obamacare. We think you have to have insurance we're
a lot more cognizant about stuff like that than our twenty five year old kids but
the reality is we also know we're going to get something out of it or we wouldn't
do it and we certainly won't do it if we had
a nother place to go comparatively speaking of
a full I mean it's slightly under two thousand
a month for full family plan if you take that out that's twenty four thousand
a year. Are you going to get more than twenty four thousand dollars worth of health
care you get a call and ask a P.
And in some other medical procedure you're you're halfway there those knees those
new knees those new hips you know to your point. And that's B.
I think you're right on in terms of some of the additional costs that we just
realized recently you know we talked about
a lot of those five cost lawsuits that were really on our radar screen in terms of
reporting that we look for and we really had Sun abolished early retirement with or
early people in and I think it was one of the things that we that was on for seem
to support were looking at it in the context of. Concision plan itself but. Maybe
forgot about the idea that do
a lot of people do get their body parts fixed before the you know for sure it is OK
answer the question George for him. But this was not
a surprise that he would throw no. It's an excellent point that's kind of an
unforseen thing. Well and to that same logic there goal part timers
now that the Affordable Care Act has set full time a thirty hours
a week anybody below that we have people here for example I believe the library
contract still says seven hundred twenty hours a year that gives you
a lot of time to go get health care. You know so and I'm not picking on them but
part timers typically somebody works for
a municipal government because maybe their spouse is self employed or they have
a family farm or they're doing something else where there is not workers' comp
insurance and so we have
a lot of additional risk with these two groups no public no private sector employer
anymore is offering coverage to part timers even if they pay the entire freight or
some portion thereof so this is
a huge benefit that psychologically the city gives to people I'm not again
advocating one hundred percent that you change it in
a flash but it is something we need to be aware of because no one else is doing it
you may be getting people coming to look for work here for the benefits and not
necessarily for the work so it's just something to be cognizant of. Now you see
a I'm going to go through this pretty quickly for anybody that wants to spend any
time with me afterwards we can talk about tell probably the cows come home but
there's
a couple things that I think are important the pair play this is the employer
mandate in fact I was just telling
a consummate Berk that they just changed the penalties which no employer has been
responsible to pay yet so they just went up four point four percent so that two
thousand dollars is now two thousand and eighty four and the three thousand dollars
penalty we're going to be talking about is three thousand one hundred twenty eight
and no one's paid yet they're not even do tell twenty sixteen so they're already
increasing penalties and something that nobody's paying so they know they're not
getting enough but they don't they're not sure what enough is going to be we
basically have to offer coverage to seventy percent of all full time employees and
we have to offer coverage or pay the penalty so this is where people say I'm going
to get out of the health insurance business I pay that two thousand dollars on
every employer it changes to
a ninety five percent threshold in two thousand and sixteen failure to offer
appropriately or the decision not to offer get you the same penalty so if you don't
offer to ninety five percent in two thousand and sixteen of the eligible full time
employees according to the Affordable Care Act you get that same two thousand and
eighty four dollars penalty for each person regardless of whether you offered it to
ninety percent you can't miss on the five The city does pass this test we we
monitor this all of the time so even when we thought it was going to be ninety five
we knew we were making it so the city does offer very very well the affordability
provision this is the three thousand dollars per per person who doesn't pass the
test penalty if you test the employee contribution so the employee portion of the
premium of the lowest paid employee against the lowest attribution
single plan is the threshold so the A.C.L.U.
Does not mandate coverage for the spouses which is why we contest to the single
plan employee contribution Marts going to take you through the test because this is
an actual city example this is how it applies to us right. So taking thirty hours
which is one hundred thirty hours
a month the lowest paid eligible employee currently makes ten dollars ninety cents
an hour or fourteen hundred plus per month ninety nine percent of that hundred
thirty four dollars
a month the current employee single premium contributions one hundred one so we're
under that we're OK We don't have seen that one thirty four The reason I point this
out is if we're over the threshold the employee eligible for subsidy in
participation on the federal exchange city be penalized even though well under. Our
current contribution is twelve percent if we just for the sake of discussion point
took that to sixteen percent. Premium contribution that would take us over that
threshold because suddenly we would go because that's twelve to sixteen percent is
not four percent that's
a thirty three percent increase so you'd be looking at one hundred thirty four
dollars you'd be knocking down that door or exceeding it so now there's games you
can play to get around you can you just there be some part time versus phone call
we got to do is say our time relays are hours you're thirty hours we're going to
get you to twenty five hours
a week then you don't meet that standard So there's ways to get around it but the
point I want to make here is that we can't simply keep raising the premium charge
because there's always going to be that thing haunting us in the background that we
have to be cognizant of you have to look for other ways to manage the cost you to
so you're saying even a part time employee at thirty hours
a week if we want if we said keep them at all percent but full time employees are
going to be sixty percent you can't do that yet we could because he would still
stay at then Rush told the threshold is that lowest paid employee single point so
you get these him towards the others right OK And remember you don't get to say
what's full time and part time anymore the Affordable Care Act has decided that
full time is thirty hours
a week. How did you what is your your thirty hours week we just say we're cutting
you to twenty five hours and now you're no longer eligible for health insurance and
I think you're out of the moronic. Trap
a thing to remember is they did the purpose the Affordable Care Act is to try to
provide insurance for
a large group of folks so. Bran talked about some of the modifications that are
taking place they know that employers are trying to make those changes just because
they're trying to make sure that they can afford to continue to stay in business
but those modifications are going to continue to be adjusted as
a relates to that kind of an adjustment to. Because that's the purpose for.
Three I'm going to talk
a little bit about some of the exchange and how they were impacted by the one thing
to remember and we've started to do
a lot of employers education sessions and various municipalities and school
districts because one of the things that employees very often don't understand is
if the city offers an affordable plan that meets all the thresholds we offer
correctly it's affordable and it meets the minimum essential benefit requirements
which I'm going to talk about in a second they're not eligible for
a subsidy no matter what their what's going on in their household so we have we
literally have
a situation where there's not necessarily free health care even in the exchange
unless we screw something up or they have
a really different or difficult home situation the single parent with five or six
little kids I don't get child support something along those lines so we want to let
people know what to the extent the state exchange plans look like the bronze plan
which is the threshold for the balance is
a two thousand dollars single deductible four thousand dollars family sixty forty
percent coverage and network no prescription drugs other than generic so it looks
very much like a Medicare Part D.
Prescription drug plan that plan for me my husband and my son with after
tax dollars is over twenty two thousand dollars
a year and it's after tax that's the bronze plan so the federal And so as you go up
silver gold platinum you just get seventy percent eighty percent ninety percent
there are no one hundred percent plans
a few more drugs so it's it's not necessarily even
a who's my doctor situation here in Wisconsin it's what plan can I afford to buy
and what drugs do I need within my within my world so it's just an interesting way
to look at health care from what is even offered so it doesn't look like Medicaid
it doesn't look like Medicare it's
a very different threshold and it's important minimum essential benefits the state
of Wisconsin is probably the second toughest insurance state in the U.S.
We have four. Eight different mandates and the city has to cover each and every one
of those things so it can be something as simple as chiropractic has to be covered
. Here in the state of Wisconsin I'm
a private sector employer and I'm self funded like you guys are I can actually
select my state so maybe I want to be status in Utah where they have four state
mandates cities can't really do that so we're kind of stuck with what Wisconsin
mandates that we offer and we as an insurance state will say nonfederal is self
funded governmental entities have to cover like fully insured carriers do so we
don't get away with some of the same things again the city passes the minimum
essential benefits test we meet our actual aerial values we meet reasonable care
standards under the Affordable Care Act there's no way the city will get
a penalty now we also have
a new requirement starting this year next year it includes prescription drug
co-payments in network everything counts against A maximum out of pocket so my
deductibles my co-payments my co-insurance if I have them everything other than
a penalty has to count to
a maximum out of pocket you can only charge employees minus their premium
contribution sixty three hundred dollars
a single and twelve thousand seven hundred dollars a family so if you have
a couple of kids for example that are huge as Manics or get
a lot of your infections and they're going to the doctor going to the doctor
they're going to have
a maximum out of pocket. It's called I'm sure to be hearing about
a few of those things. And then there's the practical out of pocket you can make up
your own energy. You can't simply result despite crease in the
deductibles because essentially you're going to hit those writings walls as well so
that's the the new world that we're dealing with and the other part we want to
remind everybody about is where we are with collective bargaining agreements the
post fact ten and thirty two World Police and fire still negotiate for premium
contribution they don't they are unable to negotiate at this time features of the
plant so we can change plan features that's still going through the court system
that could get changed we believe the interpretation is going to remain that we can
dictate what the plan will be the only thing we can negotiate is the premium share
but stay tuned for that that's that's still out there and just
a reminder that because transit workers were excluded from X.
Ten and thirty two we technically have
a separate plan for them because they did not want to go to the plan that the
council approved and we had no say in the matter it was part of our agreement so
until we renegotiate that contract which we will be doing this year. We're
we're very very in
a separate plan and we still have to negotiate with them and they may or may not be
lined up with all the other employees in their group and oftentimes you know when
we were talking about
a comparison to some of the other municipalities will see them have three and four
plans sometimes those are relics of
a situation like this where they might have just
a small group of employees in those employees were getting access to that plan
during the days when they had
a collective bargaining agreement. Some of the municipalities are transitioning to
. Less plans as a result of that but this is an example of that on
a smaller scale really have two plans transit has their own plan because of the boy
has thirteen health plans because of collective bargaining agreements sometimes it
is
a take the easy way out and try to transition people off the plane over time but it
really becomes cumbersome when you know multiple plans and nobody is on
a more very small moments we're pretty fortunate even over all those you're trying
to bargain we've stayed but you can sell it here in the interest the time brand
going to talk
a little bit about where. Where we want to look for the future Well we have three
major components they all break down into
a lot of different things and that other people are going to present but we've done
just about everything we know how to do with the health plan we've gotten you know
better discounts and by moving around we've looked at every pharmacy benefit
manager every small component that we can to manage those costs within that health
insurance plan so the whole point of this is what else can we do to encourage
people along the pathway to health because the reality is we've got to control
utilization and we've got to get people doing the right things in the right setting
so we're looking at an employer sponsored clinic here because we want them to use
more cost effective services I think you guys have heard about some of that
endeavor and John is going to talk
a little bit more about that I think but we also are looking at wellness
initiatives city of Auclair For example you going to see that on their on the
survey they're doing it all comes based wellness strategy
a little bit more about that later but literally people are starting to say we're
not going to have
a carrot and stick separately anymore we're going to beat you with
a carrot if you don't comply so there's a little bit more of a of
a dearth of we want to give you the reward but we have to get you to do the right
thing in the right setting at the right time so we're looking at all of these
things together it's not just an individual component any. You know if I describe
things. I know I'm only laughing because my husband works for an employer that
implemented the clinic and that's what their whole whole program and I'm one of
those that get don't want to have to comply so my husband's to the point of you
need to do this this this way because if we don't the premium goes off so you know
he's going to throw me out. Like this. But if I mean
a number of employers have a mandatory Cherry And if you don't take each other
a you're right you can't purchase and the reason is it's the healthy people that
elect not to participate in the ones. Going to be healthier years healthier
lifestyles so I think you have
a lot while you say you owe me going to be your day sometimes that's that's that is
costing the bills but we do want to give those rewards I think every employer wants
a healthier workforce we want presenteeism and said Of all of these other you know
isms that we end up with but the reality is how do you incentivize people
appropriately and I think we're finding with the public and the private sector if
it does it there is
a cost to incentivizing to get any sort of return on that investment you know I
think in council member Fitzgerald you know you hear he hit it right on the head I
think
a lot of the our employees understand that too and that was one of the reasons why
they suggested to city manager off that we go look with the co-pay plan they
understood that if you use the plan more you really should pay more and we're going
to talk
a little bit more about some Yeah we already have unity is only about seven minutes
so we're going to really have some members who are about four or five minutes
rather just talk about where we go from here right here where good point we're not
going to get all the work through so we're about four hours. OK. Employer
sponsored clinics It's very common in the private sector and it's growing in
popularity in the in the public sector I can tell you that we're currently
participating with the county in the school district and researching the potential
for that and. We're going to be looking for proposals and then evaluating those
proposals we can't give you any specific numbers because we have to evaluate that
first but that's what we're looking at the benefits of it are creates more
cooperative solution than just cautious doing more quality time with individuals
coaching versus care and more complete care meets reasonable care standards of
a CA but it's the whole idea is to adopt healthy lifestyles it's really
a stepping stone to wellness and workplace health it helps us control utilization
of health services for chronic illnesses because if we can manage some of those
things on the friend and we're not paying form on the back end. We become the
primary provider and so that you have that relationship that you're creating with
the employee in the primary provider and it creates easy access point for cost
effective care as everybody knows we're tapping it to go there. Sheboygan as as
probably the most experience in this area doing that the city county and school
district all of done it Walker shot just have this approved recently you know clear
is in the process of doing this right within and I think they're
a little bit behind of some of the West Bend does it at the school district level
they did not bring in the county and the city I think there are some issues down
there which if I was in the school what's been the school district I would have
avoided going to them to going to the other agencies and it just sometimes great
match right now of the school district in the county here are very interested in
that the county H.R.
Director was the person who implemented in Sheboygan County so he's very familiar
with it and has been providing
a good deal of resource and you know teaching us how that works things. Really
consider these things really clinic like it's not true it's not like going to the
doctor and the services that I did around them is that correct.
We would identify the most common services that in the services but it's not for.
Significant testing in that thing you know the whole idea of or at least not
initially severe infection right some of our wellness stuff things got there early
the easy labs eventually will get taken care of there so the next like kind of
cover some of that the whole idea is you want to get utilization you want that's
how you get your return on your investment because you're investing in
a clinic you're investing in the cost of that clinic so location access is very
important not only the employee but the dependent needs to buy in any and all
dependents were part of the play need to buy in the employee share for services has
to be priced well enough that they choose to go to our clinic versus another option
so pricing it is very important to steer people towards using it. But we talked
about those selection or the partnership with county and school district vendor
selection is very important you do decide on what levels the numbers you have nurse
practitioners how many physicians physicians assistants ours ours has
a lot to do with utilization do you have something from five pm to eight pm so that
people can go after work bring their kids after work so they don't have to take
them out of school or get out of work to do the thing make it more convenient for
for the employee and their dependents to use that services can be
a primary health services are really to what Tom talked about health coaching
biometric screenings pharmacy there's
a lot of other things you can do there you're not required you can do whatever you
want but you try to do is grab the stuff that takes the most volume that you can
get the best discounts on by providing it yourself. Wellness
programs. Basic programs as well are what we do right now we do
a health risk assessment. The program design is that if you participate in the
health risk assessment instead of paying fifteen percent premium for health
insurance you only pay twelve percent that's all it works the whole idea is to
steer you towards healthy lifestyle initiatives when you've been screened you'll
get notified Here's what we found if you have high blood pressure they'll go or
they'll suggest that you go to a doctor sometimes they say you need to go to
a doctor immediately or you need to go to a doctor within the next two weeks. With
a CA they do allow for premium differential and reduced in toy premium
contributions that that's permitted under
a CA So what we're doing right now is totally OK with what he CA's.
What we want to do is get more participation based one let's get employees to be
more engaged more active in those transition to outcomes based wellness it's not
just
a matter that I got my blood pressure taken it's I do something about it when they
say your blood pressure is up what do you you know you need to do something about
it disease management coaching getting those those types of things. But see.
Through So some considerations that we need to take
a look at is Currently we only offer the health risk assessment to employees do we
want to consider adding spouses and retirees to the health risk assessment Another
consideration is what is the cost of
a vibrant wellness program and then also the return on investment if you do any
type of research on that study suggest to do on some studies suggest three to one
so for every dollar that you spend on wellness your return could be two times or
possibly three times there's also eddies that will suggest it's more.
Just so that you have some sort of
a general knowledge Currently our budget is about fifty thousand and that includes
E.A.P. Services and also the biometric screening and with the E.P.
In the biometric screening we're looking at about forty thousand right there so
again just to give you some basic knowledge of where we're we're currently at. The
current value of the biometric screening and the health risk assessment is like
Mark had said earlier it's three percent savings in premiums so again just so that
you basically understand what that he quits to person go policy is about three
hundred dollars annually for
a dual policy to people is about five hundred seventy dollars in
a family is about seven hundred dollars just so you have some sort of
a reference there. Yes people are taking that out of those three hundred eighty so
. I think we have the right assessment we have five hundred people that.
Take the health risk assessment it's been really high but if the employee is only
and we currently only have eight people that do not participate in the health risk
assessment so it is very very high participation and just to throw
a few more statistics at you. I'll just throw three of them at you right
now we have eighty percent of our population with
a body mass index of over twenty five so that means that we have one hundred that
have less than twenty five another statistic I think that is important to know is
that we as part of the health risk assessment people followed or employees fill out
a questionnaire sixty percent stated that they rarely or never exercise so you're
looking at three hundred of our people five hundred people that take the health
risk assessment three hundred of them rarely or never X.
Or size and just one last two to stick we have forty five percent or two hundred
twenty five employees that have two or more conditions that could lead to
cardiovascular disease stroke or diabetes so I mean all of these things
are very important when we take into consideration our oneness program we don't
want to be punitive unless we're left with no other choice so you know the comment
about beating them with the carrot I think Meat meat that's
a consideration that we need to have so. We broke out we're already OK on
the slope we're clear proof to go to some. More cleaver and.
Well I think it's the wellness part is got to be we've got to get more people
involved in it because it's not just the employees it's the dependency as well and
that was if we know our dependence we're really ignoring half the half the to
health. Care costs well as retirees Yes So we need to set up plan designed to
encourage employees to seek care in the appropriate venue so if it's if we get an
employer sponsored clinic that's one thing to get them to
a specialist if need be we'll do that but we make sure you get to the appropriate
venue and over all gets reduction in medical costs. So future strategies in phase
and really what we talk about next are you know increasing employee engagement
address those eligibility issues what do we do with spouses how do we do YOU do we
address carve outs because those are things that we are paying for right now that
we are not required to do but there are major policy issues for the council.
Employees find your clinic we're going to be
a belly with polls when they come in and make
a river appropriate recommendation based on that when it happens and then wellness
as Suze said the investment gives you a really good payoff so we need to take
a look at investing in that and maybe that's done in conjunction with your clinic
at Camp. OK Where We Go From Here is a question. I just gave you
a ton of stuff on the regular and drawing board with with the limited amount of
time we have I really think we probably need to have a discussion at
a future time future meeting not necessarily to work stop shop session just part of
a direction a city manager at
a future meeting take this please call us with questions on we'll try to answer any
questions you have whether it's about our current plan or where we're going with it
as we get the proposals we'll evaluate them will provide you information on that
we're thinking of maybe doing
a segment said which may take an investment of time but if you want interested
looking at one of these employer sponsored clinics happy to make it available to if
that's what you want to do. The order we want to throw or we're probably faster of
. I'll put them on an agenda was are we do
a follow through. OK we're. To An End Thanks folks thank you sir but if you're
short of a better word you think you'll feel
a little trick. Yeah
yeah yeah. Yeah.